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Solar Energy
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Theoldguy1 wrote: »MikePfirrman wrote: »@nooshi713 -- this is a typical example. Yeah, my son sold Solar in San Diego (and later LA) for a year. He left the job because his company focused on leases. He also didn't care for their ethics. That's the only exception in California why someone shouldn't get solar. Either they would have to do a stand alone unit or perhaps if their credit isn't solid. I would never, ever encourage anyone to get a solar loan.
I'm sorry but everything you have said about how you suggest acquiring a solar system involves a loan. Some keywords, credit score, discount for cash (says interest is involved), no money down, low interest rates.
How does the way your customers get a system not involve a loan?
I’m not sure but maybe he meant purchase instead of lease? I have heard when you lease a system the savings are not as good. I purchased my system but it is financed and I still save a ton of money.
It's a loan for a Solar purchase. Like a home loan, the solar system acts as the collateral. If you do a Solar Lease, you're essentially renting a solar unit on your house.
Just like a home purchase, there is a loan involved. But you loan to own. Leasing a solar system means you will never own it and it's a foolish venture. For some, it might save them money, but typically, if you're leasing, you put a lien against your home. If you miss one payment (and most that have leases have marginal credit and have missed payments on other loans before), they can take your house.
Yes, what I meant to say was I would never do a solar lease. Solar loans are necessary to buy a solar system.3 -
So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?1
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This got me thinking about something that might seem silly.
What is the payback period for buying a house?
My mortgage will be paid off in a few years, so I currently have a relatively small part of my payment that goes to interest. The rest goes to equity. I have always considered the interest portion of my mortgage as my "rent." As a renter, I only ever pay rent. Rent can increase though. As an owner, I have other expenses like water heaters, new roof, new windows, property tax, paint, and tree trimming among others.
That said, I don't ever even "see" any of my equity unless/until I sell the house.
I am certain that my net worth has increased faster as a mortgage holder than a renter. My buddy never wants to own. He says he always wants to be able to just move. Yet he doesn't move. He did move when he had a partner. She left right after he renewed his lease. His lease is a lot more than my mortgage. He accumulates no equity.
I bought my house about 20 years ago and have refinanced twice. Both times were no-fee opportunities to get lower rates; the last was a much shorter term loan that will be done soon leaving me "rent free."
Since my plans don't include selling, and since it has already been 20 years, that sort of means my payback period is decades not years. Perhaps I was a fool to buy property.
Not.4 -
So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
Paying in full would be fine for someone that's going to live in the house for a while. It would save them money, perhaps. It depends on their viewpoint. If I had 10K in cash, I'd invest it, but that's me. I tripled my investments in stock over the last year. But if someone had the cash and wasn't 60 or 70 years old and wanted to pay cash, sure.
But most solar systems aren't 10K. Most are 25K to 35K. When a couple that's 60 comes to me and says, why not pay it in cash, I'd tell them to think cautiously. What if they can't live in the house in 10 years. Paying cash makes the point at which you break even much, much longer. Also, many are taking it out of their retirement savings.
If the goal is simply to save money and that can be done in year one, with a 20 year loan, why not borrow it? If interest rates were 7%, that would be one thing, but they are very cheap currently. And if worst case scenario happens and you have to leave the home in 5 years, you haven't paid all of it for the next home owner.0 -
Let me add that my solar system did add value to my home as well. I have refinanced a few times and gotten several appraisals and was told it added value.2
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I confess that I did not read all of these replies, but thought I would share my experience in Colorado. In either 2019 or 2020, my husband and I had several solar companies quote a system for our house. I do not recall the overall cost, but the least expensive one had a payback of 17 years. We planned to pay cash and here in the US, at that time, there was a 26% subsidy from the federal government. Even with all that, it still was a 17 year payback! That would have been an absolutely terrible investment decision to go forward with that. Also, where we are, there is a regulation of some sort which prohibited us from installing the system to provide 100% of our needed power. We would very much like to become more “green”, but not at that great of a cost.0
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So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
I know I am in Australia and not US - so things might be different.
But here, sure, you can pay the whole amount upfront here if you want- and if I hypothetically was buying a solar system now and had the money in savings to do that , I would.
Theoretically it would be better to only pay the deposit and pay the rest off over time - since it was an interest free loan and I could then get interest on my savings.
But since interest rates are ridiculously low at the moment, any such savings would be miniscule and IMO not worth the bother - I would just pay it all upfront if I could.
11 years ago when I bought my system, interest rates were higher so that equation would of been different - and anyway I didnt have enough in savings to pay it all upfront even if I wanted to, (most people probably don't) so moot point for me.
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paperpudding wrote: »So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
I know I am in Australia and not US - so things might be different.
But here, sure, you can pay the whole amount upfront here if you want- and if I hypothetically was buying a solar system now and had the money in savings to do that , I would.
Theoretically it would be better to only pay the deposit and pay the rest off over time - since it was an interest free loan and I could then get interest on my savings.
But since interest rates are ridiculously low at the moment, any such savings would be miniscule and IMO not worth the bother - I would just pay it all upfront if I could.
11 years ago when I bought my system, interest rates were higher so that equation would of been different - and anyway I didnt have enough in savings to pay it all upfront even if I wanted to, (most people probably don't) so moot point for me.
There is no such thing as an interest free loan. The present value of the interest is built into the price. Demand a cash discount then compare.0 -
well there was in Australia when govt was subsidising such to incentivise people to get solar systems - was not possible to negotiate a cash price.
Moot point for me now anyway - I bought my system 11 years ago and long ago paid out loan.
But, sure, people in other places who have the cash to pay unfront and want to do that - try this and see if it works out cheaper to pay all upfront, maybe it will be.0 -
MikePfirrman wrote: »So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
Paying in full would be fine for someone that's going to live in the house for a while. It would save them money, perhaps. It depends on their viewpoint. If I had 10K in cash, I'd invest it, but that's me. I tripled my investments in stock over the last year. But if someone had the cash and wasn't 60 or 70 years old and wanted to pay cash, sure.
But most solar systems aren't 10K. Most are 25K to 35K. When a couple that's 60 comes to me and says, why not pay it in cash, I'd tell them to think cautiously. What if they can't live in the house in 10 years. Paying cash makes the point at which you break even much, much longer. Also, many are taking it out of their retirement savings.
If the goal is simply to save money and that can be done in year one, with a 20 year loan, why not borrow it? If interest rates were 7%, that would be one thing, but they are very cheap currently. And if worst case scenario happens and you have to leave the home in 5 years, you haven't paid all of it for the next home owner.
Isn't the loan due when you sell the house? Surely the system conveys like any other attached fixture? You'll still be paying for it for the next owner -- the only difference is that you'll be taking it out of your proceeds at sale.1 -
This got me thinking about something that might seem silly.
What is the payback period for buying a house?
My mortgage will be paid off in a few years, so I currently have a relatively small part of my payment that goes to interest. The rest goes to equity. I have always considered the interest portion of my mortgage as my "rent." As a renter, I only ever pay rent. Rent can increase though. As an owner, I have other expenses like water heaters, new roof, new windows, property tax, paint, and tree trimming among others.
That said, I don't ever even "see" any of my equity unless/until I sell the house.
I am certain that my net worth has increased faster as a mortgage holder than a renter. My buddy never wants to own. He says he always wants to be able to just move. Yet he doesn't move. He did move when he had a partner. She left right after he renewed his lease. His lease is a lot more than my mortgage. He accumulates no equity.
I bought my house about 20 years ago and have refinanced twice. Both times were no-fee opportunities to get lower rates; the last was a much shorter term loan that will be done soon leaving me "rent free."
Since my plans don't include selling, and since it has already been 20 years, that sort of means my payback period is decades not years. Perhaps I was a fool to buy property.
Not.
Building equity is nice, but I feel like locking in (or freezing) the bulk of one's housing costs for several decades is an equal advantage. I've been in my house about 17 years, and it would cost me twice my mortgage payment to rent something roughly approximate, either in a house rental or a smaller square footage apartment with probably 1 or 1/2 less bathrooms that was equally accessible to public transportation. And of course by this time more than half of my mortgage payment is going to equity.1 -
Thank you, I was thinking in£ but used $ because that is where most of you are.
So the reason to suggest the older person, 60, 70 or more dose not buy is that they probably would not see a return on their money in their life times.
I've not really looked at our system for some time, I know its been changed for the worse for companies making the systems and for those who are having them installed for you. much has to be imported. But that's the UK for you.0 -
lynn_glenmont wrote: »MikePfirrman wrote: »So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
Paying in full would be fine for someone that's going to live in the house for a while. It would save them money, perhaps. It depends on their viewpoint. If I had 10K in cash, I'd invest it, but that's me. I tripled my investments in stock over the last year. But if someone had the cash and wasn't 60 or 70 years old and wanted to pay cash, sure.
But most solar systems aren't 10K. Most are 25K to 35K. When a couple that's 60 comes to me and says, why not pay it in cash, I'd tell them to think cautiously. What if they can't live in the house in 10 years. Paying cash makes the point at which you break even much, much longer. Also, many are taking it out of their retirement savings.
If the goal is simply to save money and that can be done in year one, with a 20 year loan, why not borrow it? If interest rates were 7%, that would be one thing, but they are very cheap currently. And if worst case scenario happens and you have to leave the home in 5 years, you haven't paid all of it for the next home owner.
Isn't the loan due when you sell the house? Surely the system conveys like any other attached fixture? You'll still be paying for it for the next owner -- the only difference is that you'll be taking it out of your proceeds at sale.
I would say that would be correct or possibly (but not likely) the institution that has the solar loan would let the new buyer assume the loan. In either case the loan balance is going to be a reduction in the net proceeds from selling the house.0 -
Theoldguy1 wrote: »lynn_glenmont wrote: »MikePfirrman wrote: »So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
Paying in full would be fine for someone that's going to live in the house for a while. It would save them money, perhaps. It depends on their viewpoint. If I had 10K in cash, I'd invest it, but that's me. I tripled my investments in stock over the last year. But if someone had the cash and wasn't 60 or 70 years old and wanted to pay cash, sure.
But most solar systems aren't 10K. Most are 25K to 35K. When a couple that's 60 comes to me and says, why not pay it in cash, I'd tell them to think cautiously. What if they can't live in the house in 10 years. Paying cash makes the point at which you break even much, much longer. Also, many are taking it out of their retirement savings.
If the goal is simply to save money and that can be done in year one, with a 20 year loan, why not borrow it? If interest rates were 7%, that would be one thing, but they are very cheap currently. And if worst case scenario happens and you have to leave the home in 5 years, you haven't paid all of it for the next home owner.
Isn't the loan due when you sell the house? Surely the system conveys like any other attached fixture? You'll still be paying for it for the next owner -- the only difference is that you'll be taking it out of your proceeds at sale.
I would say that would be correct or possibly (but not likely) the institution that has the solar loan would let the new buyer assume the loan. In either case the loan balance is going to be a reduction in the net proceeds from selling the house.
They roll the balance into the new mortgage. The new homeowners have no issues buying it out, because they know some or a lot of it has already been paid off. The old house owner benefits greatly from having a solar system.
There's been many studies on it to confirm. Forbes did one. Every single one says between 3 and 5% net increase in home equity by having a solar system. The only exception is when someone has a solar lease, not a purchase (another reason that I don't like leases).
My company (and most are doing this now) add in a 30 year transferrable warranty that covers installation, roof leaks (related to the solar system), panels and inverters. All work and materials covered with zero deductible, so the new homeowner also gets the warranty.
Research has shown that the older the solar system, the less equity value will increase. Likely because the older systems aren't as efficient. The typical system is guaranteed to lose less than 10% efficiency over 20 years.2 -
Theoldguy1 wrote: »paperpudding wrote: »So someone with the funds making one total payment is not permitted to do so? Is there a law which prevents full payment? Were the bill $10,000 they are not permitted to pay $10,000 so there would be no interest incurred and the set up would be purchased outright?
I know I am in Australia and not US - so things might be different.
But here, sure, you can pay the whole amount upfront here if you want- and if I hypothetically was buying a solar system now and had the money in savings to do that , I would.
Theoretically it would be better to only pay the deposit and pay the rest off over time - since it was an interest free loan and I could then get interest on my savings.
But since interest rates are ridiculously low at the moment, any such savings would be miniscule and IMO not worth the bother - I would just pay it all upfront if I could.
11 years ago when I bought my system, interest rates were higher so that equation would of been different - and anyway I didnt have enough in savings to pay it all upfront even if I wanted to, (most people probably don't) so moot point for me.
There is no such thing as an interest free loan. The present value of the interest is built into the price. Demand a cash discount then compare.
I'm going to hedge my statement a bit before anyone asks. Some retailers (furniture stores are big on this) will offer "interest free financing" and will not discount for cash. In those case when one looks at the fine print one will find that if a payment is missed or the borrower doesn't comply with any terms of the agreement the interest rate goes to 20%+ on the amount of the original loan, even if the borrower is 2 payments from having the thing paid off.
The lender is betting a certain % of the people that take the deal will have an issue and end up having to pay the 20%+ interest. Some people won't end up paying but remember the house doesn't lose.0 -
That may be so for furniture type interest free loans - doesn't mean all interest free loans have same conditions.
We had no issues with ours
Sure, read the fine print and be aware of any pitfalls - as one would do with any large purchase.
But I think for most people, loans for solar systems are the way to go.
Given most people do not have that sort of cash readily upfront.
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paperpudding wrote: »That may be so for furniture type interest free loans - doesn't mean all interest free loans have same conditions.
We had no issues with ours
Sure, read the fine print and be aware of any pitfalls - as one would do with any large purchase.
But I think for most people, loans for solar systems are the way to go.
Given most people do not have that sort of cash readily upfront.
My point is there ain't no such thing as an interest free loan from a business. There is either an interest rate stated or it's buried in the cost of the product.1 -
Theoldguy1 wrote: »paperpudding wrote: »That may be so for furniture type interest free loans - doesn't mean all interest free loans have same conditions.
We had no issues with ours
Sure, read the fine print and be aware of any pitfalls - as one would do with any large purchase.
But I think for most people, loans for solar systems are the way to go.
Given most people do not have that sort of cash readily upfront.
My point is there ain't no such thing as an interest free loan from a business. There is either an interest rate stated or it's buried in the cost of the product.
well, obviously.
I dont think anyone disputes that.
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paperpudding wrote: »Theoldguy1 wrote: »paperpudding wrote: »That may be so for furniture type interest free loans - doesn't mean all interest free loans have same conditions.
We had no issues with ours
Sure, read the fine print and be aware of any pitfalls - as one would do with any large purchase.
But I think for most people, loans for solar systems are the way to go.
Given most people do not have that sort of cash readily upfront.
My point is there ain't no such thing as an interest free loan from a business. There is either an interest rate stated or it's buried in the cost of the product.
well, obviously.
I dont think anyone disputes that.
You are disputing it.
You said you have an interest free loan. There is not such thing as I said above. Either the interest rate is stated or the interest is buried in the price of the product.
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No, I said it was an interest free loan and did not have same conditions like early pay out fees, interest added at the end etc like your furniture examples.
I do not dispute that the cost was built into the price.3
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